Simply Good Foods (NASDAQ:SMPL) posted first-quarter results on Thursday that came in ahead of market expectations, reporting adjusted earnings of $0.39 per share, $0.03 above consensus, while revenue reached $340.2 million, also exceeding forecasts of $335.93 million.
The nutritional snacking group recorded total consumption growth of 2% during the quarter, supported by double-digit gains from its Quest and OWYN brands, while performance at Atkins was broadly in line with internal expectations. Despite the earnings and revenue beat, the company’s shares edged 0.88% lower as investors weighed brand-level trends and margin pressure.
Commenting on the quarter, president and chief executive officer Geoff Tanner said: “Our first quarter financial performance came in modestly ahead of our expectations.” He added: “With our initiatives to accelerate our top line and rebuild our margins in the second half on track, we are reaffirming our full year outlook.”
Overall net sales slipped 0.3% compared with the same period last year. Quest delivered growth of 9.6%, while Atkins and OWYN declined 16.5% and 3.3%, respectively. Retail takeaway rose 1.8% in aggregate, driven by a 12.0% increase for Quest and a 17.8% rise for OWYN, partly offset by a 19.3% drop for Atkins.
Gross margin narrowed by 590 basis points to 32.3%, largely reflecting higher input costs and tariff-related expenses that management had previously flagged. Adjusted EBITDA fell 20.6% year on year to $55.6 million, compared with $70.1 million in the prior-year quarter.
Looking ahead, Simply Good Foods reaffirmed its fiscal 2026 outlook, forecasting net sales growth in a range of -2% to +2% year on year, a gross margin decline of 100 to 150 basis points, and adjusted EBITDA performance between -4% and +1% versus the prior year. Management expects results to strengthen in the second half as productivity initiatives, pricing actions and easing cost pressures begin to offset inflation and tariffs.
The company also announced a $200 million expansion of its share buyback programme, lifting total remaining authorisation to around $224 million. During the quarter, Simply Good Foods repurchased roughly 5 million shares for approximately $100 million.